Steve Jobs May Have Been Wrong on E-Books... (AMZN) (BKS)
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Although the price of e-readers such as Amazon’s (Nasdaq: AMZN) Kindle or Barnes & Noble’s (NYSE: BKS) NOOK have been falling, the price for digital books has been on a rise.
Compared to hard-copy books, digital book prices were substantially lower priced when e-readers were first released. With publishers now seeing the low prices as undervaluing the books, they are setting fixed prices on them.
A large contributor to this pricing phenomenon was the late Steve Jobs, notes the WSJ in a piece Thursday morning. Jobs asked the five largest publishers to no longer allow for discounted pricing on e-book. The request was done in an effort to lessen competition with Amazon’s discounted e-book prices. Although publishers are profiting less from the new pricing method, more publishers have joined the movement since. Currently, the Justice Department is investigation partnership and deals between Apple (Nasdaq: AAPL) and the publishers.
For many readers it may not faze them to pay the regular, hard-copy price for a digital version of the same book. However when forced to pay more for a digital copy, they might just switch back to the old fashion way. Some retailers try to justify the higher price for digital books due to their convenience, while others state it's hard for a customer to value it when they can't tell the actual thickness of the book. A few of the more popular but older books can be found used and in perfect condition for a small percentage of the price of a new digital one. The WSJ reports the pricing increase has also lead to an increase in pirated copies of e-books.
Since the new pricing arrangement, Amazon has reported growth in the e-book market has weakened. The chief executive officer at Penguin Group, a prominent publisher, John Makinson, notes increasing margin due to the new pricing method makes up for the volume loss.
Although this trend has not been seen to impact the sale of Kindles, many readers may stick with the traditional method as they now have no real reason to switch. While the cost difference may have originally enticed many to switch from hard-copy books to digital, the convenience factor may now have hooked readers, meaning they may never switch back. The adoption of the new pricing method may have been inevitable in the future of the e-book and it may just prove to be too soon.
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Compared to hard-copy books, digital book prices were substantially lower priced when e-readers were first released. With publishers now seeing the low prices as undervaluing the books, they are setting fixed prices on them.
A large contributor to this pricing phenomenon was the late Steve Jobs, notes the WSJ in a piece Thursday morning. Jobs asked the five largest publishers to no longer allow for discounted pricing on e-book. The request was done in an effort to lessen competition with Amazon’s discounted e-book prices. Although publishers are profiting less from the new pricing method, more publishers have joined the movement since. Currently, the Justice Department is investigation partnership and deals between Apple (Nasdaq: AAPL) and the publishers.
For many readers it may not faze them to pay the regular, hard-copy price for a digital version of the same book. However when forced to pay more for a digital copy, they might just switch back to the old fashion way. Some retailers try to justify the higher price for digital books due to their convenience, while others state it's hard for a customer to value it when they can't tell the actual thickness of the book. A few of the more popular but older books can be found used and in perfect condition for a small percentage of the price of a new digital one. The WSJ reports the pricing increase has also lead to an increase in pirated copies of e-books.
Since the new pricing arrangement, Amazon has reported growth in the e-book market has weakened. The chief executive officer at Penguin Group, a prominent publisher, John Makinson, notes increasing margin due to the new pricing method makes up for the volume loss.
Although this trend has not been seen to impact the sale of Kindles, many readers may stick with the traditional method as they now have no real reason to switch. While the cost difference may have originally enticed many to switch from hard-copy books to digital, the convenience factor may now have hooked readers, meaning they may never switch back. The adoption of the new pricing method may have been inevitable in the future of the e-book and it may just prove to be too soon.
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